Petrofac and Samsung awarded Oman project

PETROFAC and Samsung Engineering say they are to be awarded a US$2bn contract for a 50/50 joint venture at the Duqm Refinery in southern Oman.

The companies have received notification of intent to award the U&O (utilities and offsites) package, and expect to start work on the 47-month project subject to financial closure and full notice to proceed from Duqm Refinery and Petrochemical Industries LLC (DRPIC).

The U&O contract consists of a utility production facility that produces water, air, steam and electricity essential to the plant, a tank that stores crude oil before and after the refinery, and a sewage treatment facility.

The Duqm refinery in Oman, part of Duqm special economic zone, is being developed over 2,000 acres and is expected to have a capacity of 230,000 bbl/d when completed.

Choong-Heum Park, president and CEO of Samsung Engineering said: “Samsung Engineering has already accomplished several large U&O projects. We will be able to successfully complete this project and further strengthen our market presence in the GCC, including Oman.”

The Gulf Cooperation Council (GCC) is a regional intergovernmental political and economic union consisting of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.

Petrofac’s engineering and construction group managing director E Sathyanarayanan said: “This significant project represents our twelfth in the country and serves to reinforce Petrofac’s commitment to one of our core markets; one in which we have been present since 1988.

“Furthermore, it provides a valuable opportunity for us to continue to increase in-country value through engaging with the local supply chain and recruitment of local resources.”

This is the UK-listed oil services company’s second major contract in Oman in two months; in June it secured a decade-long agreement with Petroleum Development Oman to provide engineering and construction management services. It was also awarded a US$1.3bn EPC contract for Kuwait Oil Company’s sour gathering centre project in the Burgan oil field, Kuwait.

Petrofac is currently under investigation by the UK's Serious Fraud Office (SFO) for its dealings with Monaco-based Unaoil. In May, the SFO started questioning Petrofac’s top executives over allegations of suspected bribery, corruption and money laundering. The board has since suspended its chief operating officer, Marwan Chedid. Both companies deny any wrongdoing.